Allianz Global Investors, the fund management arm of German insurer Allianz, has come out in favour of Deutsche BÃ¶rse's bid for the London Stock Exchange following opposition to the plan from other shareholders.

Andreas Utermann, global chief investment officer for Allianz Global Investors, said a further consolidation of exchange operators in Europe was inevitable.

He said: "Overall, I think it's good to be the one who pushes ahead with consolidation, rather than to be the one who gets pushed."

But Utermann warned the Frankfurt exchange it should not pay any price for the LSE.

The Frankfurt-based funds group holds 0.1% of Deutsche Börse via a subsidiary, RIT.

Werner Seifert, chief executive of Deutsche Börse, said on Tuesday the hedge funds would not be entitled to vote on its informal takeover offer of £1.4bn (€2bn) for the LSE, under German corporate-governance law.

"A shareholder vote is not foreseen and not intended," he said.

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He added that Deutsche Börse will continue to pursue its offer of 530p a share. Seifert said the offer was a good one, particularly because Euronext, the Paris based exchange which is also interested in buying the LSE, has not stated the amount it would be prepared to offer.

The hedge funds have publicly stated the Deutsche Börse offer for the LSE is too high. They have pressed it to return shareholder money in the form of a buyback, or consider merging with Euronext.